Int.on TDS

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Bharat Rajgor (Querist)
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09 August 2010 If interest paid on late payment of TDS then whether it comes under penalty or something else.Please clarify with I.T.rules only

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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09 August 2010 Even after payment of TDS you come within the provision of penalty u/s 221 for late deposit of TDS. The maximum amount of penalty is the amount of TDS involved.

CMA. Subhash Kumar Jha

CMA. Subhash Kumar Jha (Expert)
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09 August 2010 Agree with Mr. sanjay.

Interest paid is only meant to compensate the late payment, but that does not absolve you from the liability of penalty u/s 221 for offence of failure in paying TDS in time.

CA. Pradeep Nayak

CA. Pradeep Nayak (Expert)
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09 August 2010 Interest u/s 201(1A) is only compensatory in nature & not penal.

Interest under section 201(1A) not being penal in nature, the question of waiver of interest on grounds such as reasonable cause, bonafide belief, unintentional are irrelevant.
G.M. Punjab Roadways vs. ITO (2009) 178 Taxman 112 (Chandigarh) (SMC)

Tushar

Tushar (Expert)
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10 September 2012 as said by you all,Interest is compensatory in nature and I also agree to it, Interest on late payment of TDS should be allowed as expenditure while computing total income. Agree ???

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